The Italian banks’ share prices have taken a beating recently on rumours – partially confirmed – that the ECB has contacted some of them regarding their bad loans. And now some of Spain’s domestically-focused lenders are suffering from a contagion effect, posting losses and underperforming as the scepticism spreads to their own NPLs situation. Banc Sabadell analysts highlight that “the risk of the ECB introducing new provisions or reclassifying NPLs would, in general, not make a lot of sense.”